Question

1. Prepare a detailed list of pros and cons of in-house versus software purchase.
2. Calculate ROI for both options.
3. Calculate NPV for both options. Use an 8% discount factor.
4. Create a PowerPoint presentation for Mark showing the results of your analysis, including recommendations and reasons.

Until now, the owner, Mark Turner, kept the business records on his personal computer. He created a simple database to keep track of inventory, but it is not always up-to-date. He also developed spreadsheets to track expenses and payroll. The business has grown and Mark wants to install a new computer system to handle all business functions. You are a lab assistant in the computer information department at the college. You earned a computer science degree at a two-year school, and you recently decided to work toward your four-year degree. Mark recently asked you to help him plan a system for Campus Bikes. You used an object-oriented approach to create a model of the business functions and actors involved. Now Mark wants you to do a “make or buy” analysis. Specifically, you will look into the pros and cons of in-house development versus purchase of a software package. Your research indicates that the most popular bike shop package is offered by a vendor called BikeData. In your last meeting, Mark said that tangible savings for a new system would be hard to measure, but improved customer care, better service department records, and increased productivity are expected. Mark estimates that these benefits will add up to about $6,000 per year, whether the system is developed in-house, or purchased from BikeData.



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  • CreatedSeptember 04, 2014
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